Nasdaq’s acquisition of Dorsey, Wright & Associates (DWA), a market leader in data analytics, passive indexing and smart beta strategies, will add to the index provider’s existing index portfolio, bringing model-based strategies and analysis to support the financial adviser community while boosting Nasdaq’s position as a leading smart beta index provider in the US market. The sale has been valued at $225m and will be funded through a mix of debt and cash on hand, said Nasdaq.
The deal is expected to close in the first quarter of this year and increase the company's capacity for growth in indexing across asset classes and geographies, with substantial opportunities in index licensing, said the index provider.
The combined group will bring together DWA’s 17 ETFs and Nasdaq’s 69 licensed smart-beta ETFs based primarily on dividend and income strategies. As a result, Nasdaq Global Indexes will become one of the largest providers of smart beta indices with nearly $45bn in assets benchmarked to its family of smart beta indices and more than $105bn benchmarked to all Nasdaq Indices.
SRP data shows that there are over 80,000 products featuring Nasdaq benchmarks across jurisdictions, of which over 21,500 are live structures. The Nasdaq100 is the index with the most products benchmarked (21,300), followed by the Nasdaq Biotechnology with seven structures, the Nasdaq Composite with two products and the Nasdaq OMX Emerging Markets Technology with one product marketed by Barclays in Germany in 2011.
Adena Friedman, president at Nasdaq, said the acquisition of Dorsey Wright & Associates will further cement the index provider’s position as "a major player and industry innovator”.
Nasdaq intends to fuel DWA’s growth strategy by accelerating product development, raising awareness of the DWA indices and increasing the base of potential market participants through its global distribution network.
The index provider said that its ability to create innovative indices and its long-term relationships with ETF providers, combined with DWA’s analytical capabilities and smart-beta models, are expected to lead to new products in more asset classes, including fixed income, currencies and commodities, and facilitate international expansion of the DWA offerings, beginning in Canada and Europe.
Nasdaq also said it will leverage its technology capabilities to enhance DWA’s web-based adviser tools used to deliver DWA’s methodology into tactical asset allocation models with the aim of creating more opportunities for financial advisers as the market continues to move toward model-based investing.
Related stories:
Nasdaq hires new head of ETP listings & services
FTSE and Russell to leverage index capabilities